Agricultural
17 December, 2025
Cost concerns see NSW farm sector sentiment soften
Net rural confidence in NSW dropped to -3 per cent, down from 15 per cent last quarter, broadly mirroring a national decline in sentiment across all states except Victoria.
Rural confidence in New South Wales has weakened, with the latest Rabobank Rural Confidence Survey showing sentiment falling into negative territory as high input costs continue to pressure farm profitability.
Only 21 per cent of NSW farmers are optimistic about the year ahead, down from 32 per cent, while 25 per cent expect conditions to worsen. Nearly half believe conditions will remain stable. Rising input costs — including fertiliser, fuel, agrochemicals and labour — were the top concern, cited by 33 per cent of farmers, followed by government policy uncertainty and dry weather.
Despite the softer outlook, 46 per cent of farmers expect commodity prices to rise over the next 12 months, and more than a third are optimistic about seasonal conditions.
Confidence declined across most regions, with the Riverina recording the lowest sentiment at net -20 per cent, reflecting below-average rainfall and reduced crop prospects. Central West producers were the most confident at net 8 per cent.
By commodity, sentiment weakened across most sectors. Cotton growers remain the most pessimistic (net -34 per cent), driven by low prices, while grain growers’ confidence fell sharply to net -19 per cent amid high costs and soft global prices. Dairy and beef producers also reported declines, though beef producers remain relatively stable following strong cattle prices earlier in the year. In contrast, sheep farmers recorded a modest lift in confidence, supported by stronger wool prices.
Investment intentions softened alongside confidence, with fewer farmers planning to increase spending and more signalling reduced investment. Income expectations also weakened, with fewer farmers expecting higher incomes and more forecasting declines.
Rabobank said rising costs are outpacing commodity price gains, squeezing margins and contributing to a cautious outlook across much of the NSW farm sector.
